A 20% down payment eliminates the requirement for private mortgage insurance (PMI), which can cost $100-$300+ per month on a conventional loan. It also gives you immediate equity, reduces your loan amount, and may help you secure a better interest rate. Lenders view borrowers with 20% down as lower risk.

PMI typically ranges from 0.5% to 1.5% of your loan amount per year, depending on your credit score and down payment percentage. On a $280,000 loan (10% down on $350K), that could be $117 to $350 per month. Over several years, this adds thousands to your total housing cost.

This depends on the potential investment returns versus the cost of PMI and the higher loan amount. If your investments consistently earn more than your mortgage rate plus PMI cost, investing may win mathematically. However, the guaranteed savings from avoiding PMI and the security of lower monthly payments make 20% down the safer choice for most buyers.